N. Korea's mineral
exports jump 33-fold over past decade
Yonhap News Agency.
10/2/12
SEOUL, Oct. 2 (Yonhap)
-- North Korea's exports of mineral resources recorded a 33-fold jump over the
past decade with China remaining the biggest importer of the North's
iron ore and coal, a report showed Tuesday.
North Korea's mineral
exports stood at a meager US$50 million in 2001, accounting for 7.8 percent of
its total exports, according to the report by Seoul's Korea Trade and
Investment Promotion Agency.
The mineral exports
soared to $243 million in 2005 and $1.65 billion in 2011, accounting for 59.4
percent of the North's total exports last year, the report said.
South Korea has
estimated the total values of mineral deposits in North Korea at some $6.3
trillion.
Last year, North Korea
exported $1.17 billion worth of anthracite coal and $405 million worth of iron
ore, with China importing almost 100 percent of anthracite coal and iron ore,
it said.
China: Paranoia
Strikes Deep
by Marcus Noland | October 1st, 2012 | 06:27 am
South Koreans
sometimes label Chinese investment in North Korea as “economic colonialism.” I
normally discount these concerns as slightly paranoiac but a series a press
reports from last week are starting to make even me wonder.
First, multiple
stories appeared in the Chinese and South Korean press describing an agreement
between the China Overseas Investment Federation (COIF) and the North Korean
Investment Office in Beijing, apparently a sub-entity of the North Korean Joint
Venture and Investment Committee (JVIC) to invest roughly $500 million
initially targeting infrastructure, including port development, mining,
including downstream processing, and real estate, including luxury hotels. As
noted in an earlier post, North Korea has rare earth deposits, but lacks processing facilities.
Choi Sung-jin, identified as the chief of investment of the DPRK’s Committee of
Investment and Joint Ventures, said the Chinese investors would be extended
preferential treatment in income taxes and tariffs on imported equipment and
raw materials. The official also pledged to provide legal support for the
interests of investors. Choi also indicated that North Korea is hoping to adopt
the build-operate-transfer model to finance its infrastructure projects, which
include the construction of a 376km high-speed railway, a highway project and
an airport construction project.
Then, Tokyo Shinbun,
not necessarily the most reliable sources, reported that in while in China not
only had Jang Sung-taek
negotiated agreements on the Rason, Hwanggumphyong and Wihwa Islands special
economic zones, but that North Korea and China had reached agreements to
designate Nampo, Sinuiju, and Haeju as special economic zones. A zone at
Sinuiju, the border town through which much China-North Korea trade passes, is
a natural and indeed has been mooted for years. Nampo is another natural for an
SEZ. But Haeju, with its military facilities allegedly connected to the
sinking of the Cheonan,
is practically within sight of the Incheon airport. The North Koreans jammed signals of more than 1,000 aircraft operating at
the airport according to a report recently presented to the National
Assembly. If there it is an announcement that would seemed designed to
bait the South Koreans, it would be establishing a China-focused SEZ at
Haeju–which was supposed to be the site of a North-South cooperation project
under the ill-fated October 2007 summit agreement.
There are reports that
the RMB circulate in parallel with the North Korean won as official currency in
these zones. Although some seem to regard this as a major development, it is
simply recognizing facts on
the ground: the North Korean won is collapsing, North Korean workers would
prefer to be paid in RMB, and doing all business in RMB would save the Chinese
investors from the hassle of dealing with North Korea’s arbitrary currency
moves. Parenthetically, it would seem that the populace of Haeju could use
all the help that it can get: in July a Danish aid agency provided an eyewitness account of severe malnutrition there.
Finally, the pièce de
résistance: Arirang is reporting that “North Korea has granted
China exclusive rights to explore all of its underground resources in its
latest attempt to use foreign assistance to boost its economy.” The report
may be inaccurate, and the exclusive right is for exploration, not
extraction. Nevertheless, the idea that a sovereign country would grant to the
official agency of another country the exclusive right to map the location of
its resources is mind-boggling. So much for juche. How does one say satrapy in
Korean?
